India looks to end exclusive defence deals

The 15-year vision document, which has replaced the Five-Year Plans of the Nehruvian era, will for the first time outline the roadmap for country’s defence sector

NEW DELHI: India is working on a new strategy for manufacturing defence products that envisions reducing exclusive dependence on any of its key partners including Russia, the United States, France and Israel while procuring the technical know-how, a measure that will give impetus to the Narendra Modi government’s Make in India programme. This is part of a comprehensive two-pronged vision for the country’s defence sector over the next 15 years that the government’s premier think tank NITI Aayog is working on, a senior government official told ET.

“On the one hand India will push for change in collaboration strategy with our key defence suppliers so that nothing remains exclusive to one partner and India gets the know-how,” the official said on condition of anonymity.

“On the other hand we will be working towards strengthening our own defence research and development system to match the international standards,” he said.

The 15-year vision document, which has replaced the Five-Year Plans of the Nehruvian era, will for the first time outline the roadmap for country’s defence sector as well as internal security, two strategic sectors which were out of the purview of the Five-Year Plans. Russia remains the largest supplier of military equipment to India, followed by the US, France and Israel a distant fourth.

As per the defence ministry, India signed defence deals worth over $5 billion with Russia in the past three years and the US came a close second with deals of about $4.4 billion. Between 2012-13 and 2014-15, India entered into 162 arms contracts, of which 67 were with other countries including Russia (18), the US (13) and France (six).

ET VIEW: Focus on export orientation: Export orientation would be the key. Non-exclusive segments for our defence partners make ample sense as it would boost competitiveness among the vendors, and we would be in a position to choose the most suitable JV partners. However, the military-industrial complex planned surely needs to be export-oriented and globally competitive. Otherwise, there’s the real danger that the Make in India policy for defence hardware and equipment would lead to high costs, indifferent standards and huge attendant shortcomings of domestic focus akin to the days of pre-reform and autarky.